A reader's journal sharing the insights of various authors and my take on a variety of topics, most often philosophy, religion & spirituality, politics, history, economics, and works of literature. Come to think of it, diet and health, too!

Saturday, June 5, 2010

Click here to listen to a good interview of Taleb. Taleb, who makes for delightful reading, can be difficult to listen to when interviewed because he can become a bit agitated and tongue-tied (English is not his native tongue). However, in listening to the first part of this interview, he gives a rather calm yet always interesting exposition of his ideas. The site (courtesy of Huffington Post) also provides a written summary of the interview by Christopher Lydon, which I paste below for your reading enjoyment & consideration:

For a world that wants better than the fatuous "perfect storm" account of the economic meltdown -- or of BP's gusher in the Gulf, or of 9.11 for that matter -- Taleb has revised and extended his cult classic, The Black Swan. His anomalous "black swan" (since swans are by definition white) has three properties: it's (1) any one of those unforeseen developments that comes (2) with big consequences and (3) a concocted cause-and-effect after-story. In conversation, Taleb is trying to get us to let go of "causes" and fix on the word "fragility." He is explaining -- sometimes elliptically, aphoristically, through metaphors, jokes and old folk wisdom -- why "the economic crisis has barely begun," why indeed we seem to have entered the Age of the Black Swan.

In a Letterman List, our conversation might be reduced to this:

10. Mother Nature is robust. Large modern corporations are fragile.

9. When the big bridge collapses, the "news" interest will be in the last truck that made it over, when the real story should be about the fragility of the bridge.

8. Somewhere in every Black Swan story there's a turkey. The turkey has a clear understanding of history, and of growth. The nice farmer feeds him every day, and the turkey keeps getting fatter. Then comes Thanksgiving. It's a Black Swan for the turkey. But not for the butcher.

7. We can say safely that the Black Swan started entering society with agriculture, with the fact that we started settling. Complexification started then... In my tableau of what's fragile and what's robust, the nation-state is a fragile entity, whereas city-states are more robust. So the creation of the nation-state created this big unpredictable event, that First War. Even those who saw it coming didn't see the damage it was about to cause. So the First War probably is the most consequential one, and it came in two volumes...

6. I think that today we are entering a different world of Black Swans because of the Internet.

5. Newspapers make us stupid. They overexplain with "causes" of things that can't be checked. And because they are driven by the sensational, they misrepresent risk. I prefer the social filter of news, over dinner or lunch. Anything that draws me away from face-to-face contact is harmful to my health.

4. Grandmothers had a rule of thumb after the Great Depression: work and save for a few years before you get into risk... Unpredictability and debt are not friends.

3. On bailouts: My analogy is to the gambler who is now gambling with the trust fund of his unborn great-great-granchildren... Prudence should be the first thing on the agenda of governments, not speculation. Stimulus packages are speculation... We are gambling on a massive recovery. It's too big a gamble, and besides it's immoral.

2. In the economic crisis, and in the Gulf of Mexico, what we should be discovering is not who made what mistake, but the fact of fragility. Alas, what we don't learn is... that we don't learn.

About Me

I am currently living in Suzhou, China with my wife. I offer services as a freelance lawyer to other lawyers, as well as continuing working with a legal outsourcing company. I also blog @ http://sngthoughts.blogspot.in/ and at http://greenleafadvocacy.com/persuasive-life-blog/ .